Prices, Policies, and Youth Smoking

Unless the nations of the world act, within a generation as many as 10 million people per year will die from tobacco use. This article explains the economic rationale for policy interventions in smoking, introduces the economic models of addiction relevant to youth smoking, and reviews the literature on the effects of policy tools aimed at reducing smoking. The negative externalities associated with smoking - second hand smoke, imperfect information, higher health costs even for nonsmokers - justify public interventions according to economics, especially for youth smoking. The authors discuss many of the tools available for this intervention, including excise taxes, dissemination of health information, youth access laws, clean indoor air laws, and tobacco control programs. Effectiveness of these programs varies, and no single solution adequately addresses the complex problem of youth smoking. Nevertheless, there is both cross-sectional and longitudinal evidence that youth smokers are responsive in predictable ways to price changes. The authors conclude that this is merely the beginning of a line of research with great potential and that future research should focus on pathways of smoking uptake and trajectories of the smoking habit.